Tuesday, November 09, 2010

CityWatchLA - LANCC defends DWP Reform funding

The Los Angeles Neighborhood Council Coalition (LANCC) entered the DWP Reform fray, voting unanimously to condemn last week's revision to the City Council’s proposed ballot measure, calling anything short of a fixed funding commitment "a poison pill" that will ensure failure.

At issue are the City Council’s parry-reposte moves that both advance a plan for governance and oversight of LA’s Department of Water and Power while pulling the funding rug out from underneath the yet-unformed Office of Public Accountability.

The Perry/Parks motion of last week would "delete the provision that requires the Office of Public Accountability (OPA) to be set at a minimum or one-tenth-of-one-percent of annual LADWP revenues, and instead require the Chief Administrative Officer (CAO), in consultation with the LADWP and other departments necessary, to prepare the budget for the OPA...submitting it to the City Council for approval."

Chuck Ray, Vice-Chair of the Neighborhood Councils DWP Oversight Committee and a member of the DWP’s Ratepayer Advocate Advisory Panel, says "the last minute motion removes the fixed amount of funding...and substitutes the judgment of the CAO, a political appointee. Structured this way, the City Council is snatching defeat from the jaws of victory." Ray pointed out that the budget debate comes down to Independent Oversight vs. Political Oversight.

The LADWP is the largest municipal utility in the United States but it operates without the independent oversight that is common in both the public and private sector. Typically, utilities answer to agencies and regulatory powers that vary in structure but include stakeholders, stockholders, bondholders, ratepayers, and a variety of commissions, boards, committees, and authorities.

Critics contend that the LADWP and its politically appointed Commission operate independently and without oversight, resulting in a consolidation of power that works to advance the interests of the DWP at the expense of the ratepayers in the City of LA.

Efforts to advance LADWP governance and oversight have wide support from both the neighborhood council advocates and city hall insiders.

Jack Humphreville, President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, has long advocated for "a well funded, empowered and truly independent RPA to oversee the operations, finances, and management of DWP on a timely and continuous basis."

Councilman Greig Smith called for an "Inspector General position to independently review and report on the operations, administrative and management actions of the Department of Water."

Council President Eric Garcetti joined in the call for DWP oversight and noted that the City of LA has spent over $1.5 million on consultants in the last year, simply investigating, researching and advising the City Council on specific LADWP issues, but with no comprehensive oversight role.

DWP Interim General Manager Austin Beutner acknowledges the need for oversight but says a Charter Amendment is unnecessary, arguing that "a rate informer, office of public accountability or whatever the vernacular used could actually be formed by actions of the department, together with this council."

City Council is wrapping a year-long discussion of LADWP reform, including Councilwoman Jan Perry's latest motion giving budget authority to the CAO, and moving forward with putting the creation of an Office of Public Accountability on the March 2011 ballot.

Concurrently, a City Hall discussion is taking place on the structure of the LADWP, including opportunities for the public to participate in the governance and oversight of the LADWP Commission and the General Manager.

Meanwhile, over on Hope Street, the LADWP General Manager and Commission are engaged in the development of a non-profit corporation that will operate under contract with the City of Los Angeles, offering oversight and governance, with a Board of Directors that has three business seats, three neighborhood council seats, one labor seat, one non-profit seat, and one environmental seat.

Humphreville compares the two independent RPA proposals by saying "There's no comparison. Anything short of a Charter Amendment with guaranteed funding levels for the RPA's office is a false start with built-in vulnerability."

The next step for the City Council sponsored Charter Amendment is the fine-tuning of the current document in a race to the November 17th deadline, at which point the pro and con arguments will be written.

The next step for the City Council sponsored revisions to the LADWP Commission structure is a vote at the Monday 8th joint meeting of the Rules & Elections committee and the Energy & Environment committee, then on to the City Council for a final recommendation. (the committee meeting may qualify as a full City Council meeting if enough members show up)

The next step for the LADWP sponsored "Corporation for the Office of the Ratepayers Advocate" is a presentation of the proposed by-laws, the model contract, and the names of the proposed directors at the December 7th meeting of the LADWP Commission.

The current board nominees are: Stuart Waldman and Carol Shatz - business seats, Kirsten Eberhard - environmental seat, Jack Humphreville, Chuck Ray, and Tony Wilkinson - neighborhood council seats. There are no current nominees for the open business, labor and non-profit seats.

(Stephen Box is a grassroots advocate and writes for CityWatch. He can be reached at: Stephen@thirdeyecreative.net. Disclosure: Box is also a candidate for 4th District Councilman.)